Deferred dividend accrual turns on enforceable right to receive, with withheld balance taxable only in the next year.

The withheld balance of dividend did not accrue in the year under appeal because the dividend resolution authorised only limited immediate payment and made the balance payable only after approval from the competent authority. As the assessee had no enforceable right to receive the deferred portion during that year, the income could not be taxed as accrued then. The balance dividend accrued only in the following assessment year, and the relief granted to the assessee was upheld.

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Issues: Whether the balance portion of dividend declared by the company, which was withheld pending approval from the competent authority, accrued to the assessee in the assessment year under appeal or only in the following assessment year.

Analysis: The dividend resolution authorised immediate payment only to a limited extent and deferred the balance until clearance was received from the concerned authority. On these facts, the assessee did not acquire an enforceable right to receive the withheld portion during the year under appeal, and the income could not be treated as having accrued in that year.

Conclusion: The withheld balance of dividend accrued only in the following assessment year and was not assessable in the year under appeal; the relief granted to the assessee was upheld.

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